ETHZilla, which recently pivoted from biotechnology to cryptocurrency, has approved a $250 million share buyback program, indicating the use of digital assets for liquidity.
ETHZilla's Shift to Cryptocurrencies
ETHZilla, formerly known as 180 Life Sciences, has made a strategic shift toward cryptocurrencies, which is now its core strategy. This change occurred less than a month after rebranding, helping to revive its stock price.
Details of the Buyback Program
The board of directors of ETHZilla approved the buyback of up to $250 million of its outstanding common shares. The company currently has 165.4 million shares outstanding. Management stated that this move is related to 'market conditions' and 'alternative uses of capital.'
Risks and Analysts' Observations
Analysts warn about the risks associated with financial strategies based on cryptocurrency. Some experts, like Mike Foy from Amina Bank, argue that it's too early to determine the long-term viability of such strategies. Kadan Stadelmann from Komodo Platform emphasizes risks related to over-leveraging and potential consequences of falling ETH prices.
ETHZilla is becoming part of a growing trend of companies using cryptocurrency as a balance-sheet asset. However, the risks associated with these strategies require careful consideration.
